KUCHING: The state government has thrown a lifeline to contractors by adding more construction materials in the special provisions for Variation of Price (VOP) 2.0 under the Sarawakku Sayang Special Assistance (BKSS) 9.0 package.
It will save a lot of contractors from going bankrupt or getting blacklisted by the government, said Sarawak Housing and Real Estate Developers’ Association (SHEDA) Kuching Branch Chairman Datuk Sim Kiang Chiok.
In lauding the move he said it was wise of Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg to do so in view of the rising cost of construction materials.
“This measure shows that the government does not neglect the contractors who are carrying on with their contract works with rising material costs,” he said when contacted by the New Sarawak Tribune.
Elaborating, he said according to the Department of Statistics, most building materials recorded an increase in price and have affected the cost of construction.
“If this VOP was not allowed, we might have many contractors giving up on their contracts with the government as the rise of material prices will affect their bottom line.
“If that were to happen, our state government will have to re-tender the works and most likely it will cost more to both the government and the taxpayers.
“Moreover, re-tendering will cost the government more time and at this juncture it is most likely that the new price will be much higher than just giving VOP,” he explained.
As the VOP 2.0 is for contracts by the state government and does not cover private developers, Sim pointed out that it will save a lot of contractors from going bankrupt or blacklisted by the government.
“Additionally, it will also save the construction industry from reducing the number of contractors in the market,” he said.
On another matter, he commended the initiative made by the state government in extending the Letter of Acceptance (LOA) (issued between Jan 1, 2021 to Dec 31, 2021) up to a maximum six months.
“For the contractors, this is good news as they do not have to face deduction of their Contract Sum by LAD (Liquefied Ascertained Damages) due to delay in completion of contract – which was caused by the COVID-19 restrictions, lockdowns, shortage of material and manpower,” he said.
According to him, the minimum wage increase from RM1,200 to RM1,500 has greatly affected the construction industry as they have to increase the labour cost and it cannot be claimed under the VOP.
“As a result, this cost had to be absorbed by the contractors and cannot be claimed against the government contract,” he said.
Bottom line is, the BKSS 9.0 does not only benefit the construction industry but also all Sarawakians as Abang Johari has announced discounts on the monthly electricity and water bill, he said.
“This announcement by the state government shows that they really care for us, the rakyat and are helping us (in any way they can) to reduce the living cost.
“It is undeniable that the economy now still needs time to recover from the prolonged pandemic and the effect of the Ukraine/Russia conflict.
“However, we in Malaysia are fortunate because our inflation is still under control due to our subsidies and price control over essential items,” he said.
